WEDNESDAY, AUGUST 3, 2016
HIGHER ED AS A BUSINESS
Accepting Risk and Rejecting the
Status Quo: Fostering an
Innovative Higher Ed Culture
DAVID COLLIS
PROFESSOR OF BUSINESS ADMINISTRATION, HARVARD UNIVERSITY
Corporations across the globe have been focused on the
question of innovation for decades and longer. The desire
to become leaner, better and more efficient has driven
innovative leaders for years. In higher education, however,
this innovative mindset is a relatively new phenomenon, and
one many stakeholders are still coming to terms with. In this
interview, David Collis reflects on a few of the lessons and
roadblocks that face innovation in the corporate world and
shares his thoughts on how these ideas can inspire leaders
across the postsecondary space.
In big corporations, one of the biggest impediments to
innovation is that people won’t take risks. Organizations are
not designed to take risks and it has the unfortunate effect of
creating risk aversion in the organization. Most organizations
are designed to minimize Type 1 errors, or errors of
commission—where you do something and it turns out to
be wrong. For individuals, the downside if you do something
and it doesn’t turn out to be correct is getting fired. All of
this builds an organization based on risk aversion, where
individuals work to avoid Type 1 errors of commission.
The EvoLLLution (Evo): How do the challenges
facing innovative higher education leaders
compare with those facing business leaders?
Everything has been designed and all the systems are in place
to minimize Type 1 error. Unfortunately, this increases the
number and significance of Type 2 errors, which are those of
omission—where you don’t do something that you should
do for fear of getting it wrong. That’s probably the biggest
obstruction or roadblock to effective innovation in large
companies.
David Collis (DC): The most important part you have to do
inside the organization is begin to change the culture because
that’s the impediment here. What are the impediments?
What are the roadblocks to innovation? Once we understand
that, we can begin to think about what it’s going to take to
change those.
As a result, big organizations aren’t particularly innovative.
People are scared of failure, and if you have to get through
so many roadblocks and so many people who can veto
innovation along the way, it becomes
cumbersome.
In these instances, the most important
thing that corporate leaders do to get
innovation started is to switch the
thinking around. A classic example
of this approach to leadership is Jack
Welch when he took over at GE. The
first thing he did was reward people for
failing, which sounds counterintuitive.
However, early into his tenure, GE
had been trying to come up with an
extended-life lightbulb. They invested a
huge amount of money into this project
but it hadn’t worked. Presumably, the
people on the project had done a good
job—the project simply failed because
the technology had not panned out.
So one of the first things he did was
promote the individuals who tried to
make the bulb a reality. Right there
you can see the symbolic shift from
what typically happens in companies:
You’re typically penalised if something
you do fails. At GE, it’s okay to fail, as
long as you’ve been innovative. Just
that shift of encouraging and rewarding
risk-taking is one of the most important
things you can do in an organization to
get innovation going. There’s going to
be successes and there’s going to be
failures. Most organizations minimize
the risk of failure, which, by definition,
means tamping down innovation, but
organizations need to flip that around.
Corporations today need to find ways
to encourage people to take risks and
reward them even if it doesn’t turn out.
It can be very challenging to creative
a significant change in a major
organization, but it’s still possible to
stoke innovation. In the old days we
use to talk about a skunkworks—these
separate or discrete teams that serve
as the source of ideas and innovations.
This is a good way to approach change.
With radical innovation you need to
incubate, then integrate. If you leave
innovation in hands of the legacy
organization, what tends to happens
is the organization gets overburdened
by the change and you go back to
the old ways of doing things. Set the
skunkworks off by itself, incubate it and
then begin to think about integrating it
back into the whole. In all, the chances
of delivering something truly innovative
increase if it’s incubated in a separate
organization. That way you can then
identify it, give it credit, champion
it, validate it and then begin to think
about integrating it back in. When it
comes to real innovation, you need
to demonstrate symbolic successes
to get the organization recognizing
innovation is an important part of the
organization’s culture.
organization and they’re worried about
themselves. All of these things conspire
to make it hard for anyone to bring in
innovation.
There’s a classic quote, “The only thing
that can’t be vetoed in higher education
is the status quo.” That is a real truism.
It’s so difficult to bring everyone along
when every part of the organization—
whether it’s the president or an
administrator or the faculty—essentially
have veto rights on what you can
do. That makes it even more difficult
to innovate inside higher education
institutions than in a major corporation.
Evo: How could higher
education leaders learn from
the experiences of innovative
corporate leaders?
It does take some leadership from
the top to drive innovation because
the institution won’t change itself.
What’s more, it takes courage to say,
“We’re going to try some things and
not all of them are going to work and
that’s fine.” Another way of thinking
about this innovation is determining
the appropriate number of failures an
organization should have in a year. I
don’t know whether the right answer
is three, or if it’s eight, but I know it’s
more than zero. Yet particular higher
education institutions are designed and
set up to have absolutely zero failures
and that’s simply wrong—you have to
have some failures if you’re going to be
innovative. The leader of the institution
has to have the courage and has to
acknowledge and accept that some of
the projects an institution takes on are
not going to work.
DC: The innovative culture is even worse
in higher education than it is in big
companies. In higher education, there
are so many different constituencies
and invested interests to navigate
through, all of whom are trying to
protect themselves. Each constituency
is defensive of their part of their
That’s what we’re doing here at Harvard
Business School. In the old days, when
our organization was more risk-averse,
we would plan, test and pilot every
single thing before we launched
anything. This meant it took years to
get anything out there and when it did,
in fairness, it worked pretty well. Our
What’s more, it
takes courage to say,
“We’re going to try
some things and not
all of them are going
to work and that’s
fine.”
The EvoLLLution is an online newspaper dedicated to non-traditional higher education. It is the brainchild
of Destiny Solutions, a company that enables postsecondary institutions to deliver world-class customer
service, grow enrollments and capture new markets while increasing operational efficiency.
current dean has a mindset where we
set a general direction—a common goal
for the organization to achieve—and
then we try to make it happen within
the bounds and parameters of HBS. He
has faith in the quality of the people
in charge of the initiative, as well as in
their adaptability and flexibility, to know
that we’ll end up in a good place even
if when we start without knowing the
exact details of the final product. We
have shifted from an “analysis, analysis,
analysis” mindset, where we knew the
exact outcome before taking a single
step, to a new agile, innovative and
creative one.
Admittedly, it might be alright for
an institution like HBS to have a
high threshold for failure, given the
resources at the school’s disposal. It’s
a little bit tougher to accept risk in
other institutions with tight budgets.
However, culture change in an
organization requires a willingness to
do things differently and taking risks is a
significant part of that.
Evo: What do senior leaders
need to do to ensure that
they’re not compromising that
innovative mission of these
traditionally periphery divisions?
DC: More than protecting the innovative
mission of the skunkworks, leaders
need to be concerned with how they
can bring that innovation back into the
core of the institution. The roughest
road is when you accept that an
innovation happened in a periphery
unit like continuing education and then
try to integrate that into the traditional
undergraduate part of the institution,
for example.
Many higher education administrators
and faculty can accept that innovation
is happening on the periphery of the
institution, but what does that mean?
It means that there’s always someone
innovating. It means that eventually
leadership has to take an innovation
that has been demonstrated to be
effective and start expecting it to
be integrated into the core of the
institution. Frankly, that’s where you
start to get the body trying to reject
the implant. That’s the point at which
the leader of the institution has to say,
“I don’t care that you might have done
things this way for so long, but we’re
actually going to start doing this new
stuff as well and I’m expecting you to
do it.”
At the end of the day, if the legacy part
of the institution is not willing to adapt
to change, then you have to start to
change out some of the individuals.
This is, of course, really difficult in
higher education with tenure and so
on, but you have to be willing to let
people go or lose a course or a program
because it’s not willing to embrace
the innovation. However, in higher
education there isn’t this CEO who can
tell everyone what to do that, while in a
corporation there is.
Evo: Why is innovation so
important for higher education
today?
DC: The challenges confronting higher
education have gone up enormously.
Higher education today has to do this
dance, they have to maintain this
balance, of delivering high-quality
education with broad access at a low
cost. That’s a triple objective. The
pillars of quality, cost and access are
difficult to get right in the best of
circumstances. Then you throw in things
like global competition and heightened
expectations, advancing technology
and all these contextual changes
providing new opportunities and new
ways of doing things, new markets,
new competitors—it all complicates
life enormously. There are external
pressures layered on top of the internal
complexity of managing those three
pillars that have really only come to a
head in the last 15 to 20 years.
If we just carry on doing things the
same way, we’re not going to solve
anything. That’s why innovation is so
important. It’s only by doing things
differently that an institution will be
able to respond to those external
phenomena and satisfactorily meet
those three objectives.
KEY TAKEAWAYS
It will take significant innovation
and transformation for institutions
to manage the three pillars of
cost, access and quality while
remaining competitive domestically
and globally and simultaneously
delivering the experience today’s
learners expect.
An innovative culture starts with
cultivating a willingness to try and
fail and an understanding that the
status quo is unsustainable over
the long term.
While a skunkworks is critical to
actually getting an innovative
project off the ground, the real
challenge lies in integrating that
innovation back into the core
institution.
The EvoLLLution is an online newspaper dedicated to non-traditional higher education. It is the brainchild
of Destiny Solutions, a company that enables postsecondary institutions to deliver world-class customer
service, grow enrollments and capture new markets while increasing operational efficiency.